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FxWirePro: Gold declines slightly after hawkish Fed, good to sell on rallies

Gold has lost more than $10from yesterday high on strong USD and rising US year bond yield.

The major three factors that drive gold prices

 US dollar Index: Bullish for intraday. DXY has taken support near trend line and jumped more than 100 pips from the low of 95.68.The index jumped till 96.80 and is currently trading around 96.77.The near term resistance is around 97.20 and any break above targets 98. ( negative for gold).

USD/JPY: strong . The pair has jumped more than 100 pips from low of 112.94 and hits 5-week high. It is currently trading around 113.90. The near term resistance is around 114.25 and any break above targets 114.55/115. Slightly negative for gold.

 

US 10 year yield : US 10 year yield has shown a recovery of more than 2% and any break above 3.25% confirms further bullishness. It is currently trading around 3.228%. Slightly negative for Gold.

 US 2 year yield: It is trading higher and hits fresh multi-year high at 2.98%.The spread between US 10 year and 2 year has decreased from 30bpbs to 23bpbs.

Gold technical

Major support $1183

Major resistance - $1240

 The yellow metal has lost almost $10 from high of $1227 made yesterday on account of strong USD and US yield.On the higher side, major resistance is around $1240 and any break above $1240 will take the commodity till $1250/$1265 .It should close above $1265 (200- day MA) for bullish continuation.

The near term support is around $1218 (55- day EMA) and any violation below will drag the commodity down till $1212/$1200.

 It is good to sell on rallies around $1224-25 with SL around $1232 for the TP of $1200.

 

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